31 January 2022: Private equity firms Vista Equity Partners and Evergreen Coast Capital, announced their acquisition of virtualisation tech firm Citrix Systems. Citrix’s secure digital workspace and hybrid work environments will be merged with the market data management and business intelligence features of Vista’s TIBCO. The all-cash $16.5 billion acquisition, which is expected to be formally closed mid-2022, will impact Citrix customers, amounting to approximately 100 million end-users.
The buyout will make Citrix a private venture and address its debt after reporting a 1 percent decrease in annual revenue at the end of 2021. Reports of the deal have been in the news for quite some time, despite Citrix acquiring Wrike last year to further support hybrid work models for its clients.
Why it’s Important
At the start of the pandemic, demand for Citrix’s digital workspace solutions increased to allow secure access to corporate information systems through web traffic isolation, as well as remote access to devices in physical offices for employees on a work-from-home setup. However, there have been concerns that Citrix has not been at the forefront of innovation in the last few years.
The acquisition has the potential to provide Citrix with an opportunity to invest in new features now that its Desktop-as-a-Service tool competitors (Azure Virtual Desktop, Amazon Workspaces and VMWare Horizon DaaS Platform) have outperformed the Florida-based virtualisation tech company.
However, history of previous acquisitions suggests that that potential will only be partially realised, if at all. IBRS has observed that among venture capital firms that have bought tech companies, users should not expect any new features to be released any time soon since private equity managers often prioritise profitability on existing customers using the same range of products.
Conversely, with Citrix being consolidated with TIBCO, there is an opportunity to repackage the brand, add sophisticated integration and workflow capabilities to an existing market that’s maturing.
In the near term (2-3 years), IBRS does not expect much direct impact on current clients.
- Desktop / EUC teams
- Business stakeholders dealing with workforce management and project delivery
Since many organisations have adopted digital workspace architectures (as opposed to end user computing architectures), they should review their current service contracts that may be impacted by mergers and acquisitions in relation to workspace technologies. One strategy is to centralise vendor management activities and develop a set of governance policies.
IBRS also recommends organisations running Citrix review the papers below, and then schedule a consultation session with IBRS to identify the next best courses of action for their enterprise.
Related IBRS Advisory
1. Mergers & acquisitions require federated service providers governance
2.Running IT-as-a-Service Part 46: Mergers and acquisitions impact on service contracts